Matt Stoller: The Broader Net Neutrality Narrative

By Matt Stoller, who writes for Salon and has contributed to Politico, Alternet, The Nation and Reuters. You can reach him at stoller (at) gmail.com or follow him on Twitter at @matthewstoller. Originally published at Medium

In early 2006, AOL and Yahoo announced plans to charge senders of email a small ‘postage fee’ to have their email delivered to AOL and Yahoo customers. This fee would cost roughly one fourth of a penny per email, so small as to be virtually insignificant. While not particularly onerous in the context of real space, where delivering mail has per item costs, this was a potential blow to the emerging politics of the internet world.

At the time, these companies argued that this postage fee was a measure that would help reduce spam and identity theft. It would ensure that legitimate email would be delivered, in the priority that recipients would like. Oh, and it would help email services place themselves as middlemen in the communications space, taking a slice of a penny here or there from senders while serving ads to their users. A quarter of a penny per email sounds like an insignificant sum, but there are roughly 100 billion emails sent every day. So it adds up.

This happened within a particular political context. Organizations that had captured the political energy from controversies over the war in Iraq, 9/11, and the Clinton impeachment had built themselves through large email lists. The organizers quickly realized that move by AOL and Yahoo could eliminate their ability to organize. They quickly make their opposition known, and this plan was beaten back before it had a chance to be implemented. The consequences of this scuffle were enormous, though it’s hard to argue that what is important is what never happened. Yet, think for a moment. Had this attempt at postage pricing succeeded, it is unlikely that Barack Obama would have defeated Hillary Clinton in the Democratic primary, and it’s possible that a whole bevy of interesting and important centers of cultural influence — Kickstarter, for example — would not exist today. I was a peripheral part of the group that worked on this postage fee problem, and it was the first indication I got that pricing laws were essential tools of political power.

Of course, I didn’t think of it this way, because the underlying principle of a political movement takes time to emerge. But this was the first exposure the liberal space got to industrial policy, pricing power, and antitrust. And it trained a bunch of us to recognize the net neutrality problem as a similar, critical threat.

Almost immediately after this long-forgotten controversy disappeared, the net neutrality debate flared up very publicly. The Supreme Court had a few months earlier allowed the Federal Communications Commission (FCC) to deregulate broadband in the Brand X case, which was quickly followed by statements by telecom CEOs that they internet was now theirs. AT&T CEO Ed Whiteacre said this clearly, when he argued that “anybody who expects to use pipes for free is nuts!” He didn’t mean free, what he meant is that if Google wanted to move content through AT&T’s pipes, AT&T would get to determine the price. And if that price happened to be higher that the price charged to a similar competitive product offered by AT&T or by a special favored product by a client of AT&T, well, too bad. Whiteacre wanted to engage in discriminatory pricing, and that was the essence of the net neutrality conflict. This would turn the internet into a cooler version of cable TV, with all content controlled from the center.

The Republican Congress then moved to enshrine the telecom’s vision of a cable-ized internet into law. This is when the first public flare-up happened. Republicans introduced a telecom bill that would have prohibited net neutrality. A Democrat attempted to attach a pro-net neutrality amendment to this bill, but the telecom subcommittee in April of 2006 voted down this provision by an overwhelming bipartisan majority. Prior to this, few except scholars and lawyers really believed the internet itself was under threat, or even that the architecture of the internet itself was political. This vote changed the dynamic entirely. It provoked outrage and awareness of a much broader scope than had commonly accompanied telecommunications legislation. This outrage confused the political establishment. After all, telecommunications deregulation had been going on for decades, without much of a murmur from anyone but nonprofits without deep wallets.

But what the telecoms didn’t realize is that the institutional coalition that undergirded the support for letting them fix prices was falling apart. The public had lost faith in the regulatory apparatus organized to protect them. It was the height of the Iraq War, a war of choice marketed by a pliant media and opposed by millions of protesters. There was deep frustration at attempts to slash PBS funding, and anger at the Federal Communications Commission’s willingness to tolerate increasing media consolidation. This was also the time when liberals began to realize that Fox News was a purely partisan political actor, after having been bludgeoned by the odd Clinton impeachment and 2000 election recount. The oligarchical structure of various media businesses had created policies that were widely disliked, and the public began connecting the dots in a way they hadn’t done before.

From this stew of motivations came a desire to protect the one space which seemingly allowed for actual honest deliberation without gatekeepers — the internet. And for the next three years, writers and activists wrote and organized around the principle that telecommunications companies like AT&T and Verizon should not be able to block entities they did not like from displaying internet content to AT&T and Verizon customers. It was nine years ago, so I don’t remember it that well, but I remember writing about net neutrality incessantly. Adam Green, who had pushed back on the postage fee plan (and then also on an early Facebook privacy violation called ‘Beacon’, which were other industrial policy choices), ran the net neutrality campaign for Moveon. Free Press, with a remarkable crew of talented thinkers and organizers (Ben Scott, Tim Karry, Jen Howard, Marvin Ammori, Craig Aaron, Josh Silver, Adam Lynn, and many others) along with a set of media reformers from earlier generations, began raising awareness of the net neutrality conflict as well. The coalition included Moby, Christian Coalition, Gun Owners of America, Credo (then Working Assets), small business owners, and video gamers. A guy who made a tron costure endorsed net neutrality, and his video endorsing it garnered 5 million views. So did Ask a Ninja.

My particular slice of the fight was to get Democratic Senate candidates in 2008 to endorse net neutrality. They all did, and then most got into office because it was a wave year. The publicity around net neutrality and the wave election helped transform the Democratic Party’s approach to net neutrality, and telecommunications deregulation more generally. I also openly criticized what I perceived as bad faith lobbying by prominent Democratic operatives, and encouraged ‘the netroots’, such as it was, to think about net neutrality as a core agenda item.

It was all part of a really interesting momentum shift in the political approach to regulatory policy. Prior to this fight, the argument seemed to be organized around whether government should regulate an industrial sector, or not. The net neutrality fight saw a changed frame. It was not a question of whether government should regulate, but whether Verizon should arbitrarily regulate internet use or whether there should be clear rules of the road. The momentum seemed unstoppable. Candidate Obama endorsed the concept (as is recapped in this vide0). Senator Ted Stevens gave us a viral moment where he talked about the internet as a ‘series of tubes’. I was actually the first person to write about his rhetoric at the hearing, but I was getting it from a person in the room and I didn’t have the audio. It seemed like we were going to win this fight.

Last week, it looks like we did win, at least on the policy of net neutrality itself (whether we have overcome the centralizing and autocratic tendencies of monopolistic power centers is less clear). It was a much longer and more winding road than expected, and a whole generation of incredible activists, lawyers, historians, and thinkers amplified the fight after 2008, and actually won. And to be clear, this essayisn’t meant to be a comprehensive history of the net neutrality fight. I hadn’t yet been exposed to a lot of the people who had done deep intellectual and political work around net neutrality, and the lonely difficult work of opposing bad telecommunications policy in the 1980s and 1990s. I just named a few actors that I knew at the time. Looking back, though, if there’s one person who really operated with superb strategic insight and tenacity this whole time, it would be superlawyer Marvin Ammori, who is the person that I hope will be a future FCC Chairman.

What I want to note is what this journey has meant, because the actual regulatory policy itself, while obviously a critical tool in terms of structural an open internet, is almost less important than the construction of a new political coalition of industrial interests and the creation of a new and sophisticated political consciousness for millions. This includes, by the way, me. Because while I knew I was fighting for something I thought was important, the actions themselves came before the ideological foundations of those actions.

So here’s what I think the net neutrality fight means.

First, it is the reemergence of populist politics into the industrial sector. For roughly fifty years, the tradition of populism has been organized around important questions of ensuring that women, gays and lesbians, African-Americans, latinos have access to American middle-class institutions. This has coalesced into legislative agendas designed around important issues like pay equity, educational access, taxation, abortion, and so forth. In fulfilling the essential and beautifully meaningful promise to grant the same civil rights to all no matter one’s race, color, creed, sexual orientation, age, or gender, populists did not necessarily understand how to address the crisis presented when the institutional basis for prosperity and property rights (a civil right in and of itself) were clearly falling apart. The New Deal worked to create institutions that supported a prosperous white heterosexual middle class, and a reasonable reform goal was to make sure that all get access to these institutions. But as we helped to build justice for all on top of a solid economic foundation, the foundation itself began to crumble. The middle class itself frayed in the face of increasing corporate power and globalization.

This slow boiling crisis wasn’t entirely ignored, but liberal economists largely focused on macro-economic solutions, the ISLM model of demand management and redistributions of wealth via taxation (check out Piketty for a good example of this). The micro stuff, corporate power and industrial structures, was left wholly unattended. The net neutrality debate is the return to a populist tradition of looking at the specific foundations of our culture, not abstract concepts like GDP but specific institutions like Verizon, Comcast, and AT&T. The net neutrality debate isn’t being argued in isolation, there is also real popular interest in banking structures and in the energy space because of the financial crisis and climate change. Corporate power is no longer seen as monolithic, instead corporations are seen as political actors who must be balanced off so no one actor can be a king among commoners.

Second, the entities who emerged in this populist movement included a whole host of small businesses, internet businesses that have become attuned to power and the need for democratic processes to place checks on authoritarian threats that come from private monopolies. Being able to have a small businesses and use your private property without needing permission from private gatekeepers is an essential civil right and a training ground for political and civic talent. Remember, Harvey Milk, the first openly gay elected official in America, built his political base from his camera store.

Third, and this is connected to my first point about industrial politics, this is the first significant anti-monopoly principle affirmatively put into legal force since at least the 1970s. Net neutrality is a common carriage regulation, part of a tradition that dates back to Roman times, but it also is a historical spinoff of laws that were intended to constrain Standard Oil from destroying its competitors. Once again, this is not being done in isolation. What is “Too Big to Fail” if not cultural resentment at monopolistic corporate actors with too much power? It is not just that telecommunications giants are big companies that can their strategic positions as toll collectors in key bottlenecks of the economy, it is that they are perceived to be dominant politically. Anti-monopoly laws, as Zephyr Teachout notes, enshrine anti-corruption principles as much as they organize markets.

Fourth, and once again this is connected to both industrial politics and to my original opening anecdote, net neutrality is a pricing law. It is a law that says that telecommunications carriers may charge a price, but they may not charge discriminatory prices based on who you are. They can charge you for consuming or sending more data over their network, but they can’t charge you for sending the same amount of data over their networks as someone else. It takes at least part of the ability to fix prices out of the hands of private powerful middlemen. Interestingly, when the FCC came out with its decision, telecom stocks popped up, because the FCC Chairman Tom Wheeler made it clear that ‘rate regulation’, or explicit pricing caps by the government, were not going to be included. I don’t think usage caps are included either. These are both interesting problems, and there are additional possible problems with interconnection charges, which is a related question of sending content over networks. But the basic point remains, millions of people acted to make sure that at least some pricing power would be in the hands of the public rather than in the hands of monopolistic owners of cable and telecommunications networks. That’s a really big deal. And once again, it’s not isolated, you can see the Consumer Financial Protection Bureau coming out with rules on payday lenders and credit reporting agencies. These are also pricing laws. And pricing is about power.

There are many consequences yet to come. Legal precedents are being set, and hundreds of internet businesses have had their first experience in politics, and saw the political system affirmatively do the right thing. Hundreds or even thousands of scholars have looked at question of net neutrality. Some examples of historians whose work was prompted by these questions include Victor Packard’s “America’s Battle for Media Democracy” and Joanna Guldi’s analysis of British history “Roads to Power: How Britain Built the Infrastructure State”. And millions have had a taste of what it means to govern and restore some public claim over the industrial and institutional systems over which flow our resources, capital, information, and goods services.

That’s a big deal.